Stumbles to 2-mo. low on US, Europe fears

By John Tilak TORONTO, Nov 13 (Reuters) - Canada's main stock indexslipped to a two-month low on Tuesday, dragged down by resourceand financial shares, as investors fixated on fears of a fiscalcrisis in the United States and economic turmoil in Europe. Concern over whether U.S. politicians would be able to reacha deal to tackle the "fiscal cliff" of spending cuts and taxincreases that threatens to push the economy into recessioncontinued to dampen sentiment, as did a new controversy overGreece's debt crisis. "The main thing hanging over the market right now is thefear of what's happening in the macroeconomy, whether it'sEurope or the fiscal cliff in the United States or sloweractivity in China," said Michael Sprung, president at SprungInvestment Management. "All this feeds into the Canadian market through worriesabout what's going to happen to energy prices or commodityprices." Oil prices fell for the second day in a row over concernsabout lower demand. Suncor Energy was the biggest contributor to themarket's decline, falling 2.5 percent to C$32.55. The energysector, one of the biggest on the index, was down 0.7 percent. The Toronto Stock Exchange's S&P/TSX composite index ended down 56.80 points, or 0.47 percent, at12,134.66. Earlier in the session the index fell as low as12,124.35, its weakest level since Sept. 6. The materials sector, which includes mining stocks, fell 0.9percent, hurt by falling commodity prices. Barrick Gold Corp was down 1.3 percent at C$35.34,Goldcorp Inc fell 1.1 percent to C$42.93, and U.S. goldfutures were down in late-day trade. "The falling commodity prices are more than offsetting theincrease in production we're seeing across the resource sector.They are having a very large impact on stock prices," said CraigFehr, Canadian market strategist at Edward Jones in St. Louis,Missouri. "By and large the markets are going to be in a wait-and-seemode as we progress towards the end of the year," he said. Some financial stocks declined, with Toronto Dominion Bank falling 0.4 percent to C$80.36 and Manulife FinancialCorp trading down 1.2 percent to C$12.15. The financialsector was down 0.3 percent. Shares of Shoppers Drug Mart Corp jumped 3.3 percentto C$42.46 after the pharmacy chain reported higher quarterlysales. Quebecor Inc gained 1.8 percent toC$35.90 after the Canadian media and telecommunicationsconglomerate said it was cutting 500 jobs in its Sun Media unitas the business struggles with declining advertising revenue andweak circulation. Canadian department store chain Sears Canada lost5.7 percent to C$11.76 after reporting a quarterly loss on lowersales.